Good morning, everybody. I am Janine Shelffo. I am co-head of our Media and Telecom and Internet Investment Banking Group, for those who don't know me, and I am delighted to kick off the morning here in Salon One with WWE. We have George Barrios, Chief Financial Officer of the company, who will be presenting to you.

George has been a regular at this conference since he joined the company in 2008. George?

George Barrios

Thanks, Janine and thanks for having us. Welcome everybody. Today I would like to talk to you about WWE and touch on a few, what we believe, are important strategic issues. Number one, we will talk about what we view the core competencies of the company and essentially our economic mode that is our ability to create compelling content, our ability to drive a real powerful brand in connection with our audience and then our ability to take that powerful content and distribute it in a myriad of ways which gets us to the underpinnings of our business model and one of things that we really, really focus on is the diversification.

Diversification in terms of platform. So the company has roughly $500 million in revenue. That cuts across several media platforms. We are in every form of media that exists and none of the platforms comprise more than 25% of our revenue. So you look at our live events, our television licensing, our integrated sales, our digital media, our pay-per-view business, our toy business, our videogame business. All very healthy, all doing relatively well and none of them, again, comprising more than 25% of our revenues.

The other level of diversification is geographic. Today anywhere between 25% and 30% of our revenues, depending on the period, come from outside the U.S. and within that it comes across 50 countries across the three major regions of the world. So there is significant diversification geographically.

The third thing we will touch on is the financial model. WWE's gross margins sit, again depending on the period and mix of revenues, somewhere between 40% or 50% in any given period. Our variable margins, however, given the way we execute our business, significant revenue share is licensing businesses tend to be in the low to mid 70s. Again, given the mix of the revenues in any given period. So there is a lot of operating leverage within the business.

The other part of the financial model is relatively low capital investments necessary for core business. Company is making some strategic investments, which I will talk about to drive growth in the future but if you just look at the core relatively low capital intensity.

The final element of the discussion today is how we are looking at the future and we will talk about a lot of individual elements of that but I think the things that resonate for us are few as we look at our future. Number one is the power of the brand. So there is a lot of investment and a lot of bandwidth energy within the company continuing to drive the brand. It is our economic mode.

The second is the secular trend of continuing proliferation. This is a global phenomenon, not just in the U.S. which has been the focus. A lot of people tend to focus about the U.S: only but it is really globally. It is how many more new distribution platforms there are for content creators that is creating what we believe is a secular trend in the value of content upswing. So we are very much focused on taking advantage of that.

Then finally international growth. WWE spent the last five to seven years investing fairly heavily in emerging markets and we think that will pay off in the next few years. So those are the elements we will talk about today. Our core competencies, the business model and its diversification, the underlying financial model and strategically how we look forward.

I think one of the, before we started on a lot of that detail, I think it is valuable to just get a sense of how powerful the brand is with our fans around the world.

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One of the reason we are such great partners for our television partners around the world is diversity of our audience. So when you look at the WWE's audience in the U.S., it’s a pretty good proxy for the global audience. About two thirds male, so definitely skews that way but a third female, a sizable number. In the U.S. that a number of almost 5 million watching our shows every week, females.

When you look at the age groups, it's similar. WWE is a multigenerational family viewing experience. That’s the way the product gets consumed at live events. That’s the way it gets consumed on TV. No age group really over indexes significantly. So roughly the child age group is about 20% of our audience in the U.S. young adults about 20%, adults about 20% and seniors about 20%.

Ethnicity, we over indexes a little bit in the African-American community, in the Latino community, but again the key point is a very diverse audience. And that diversity also gets manifested in the viewership we have every week. Again U.S. data, but relatively indicative outside the U.S. as well. If you looked at our average viewers for Raw and Smackdown in the key demo, men 18 to 34 our average viewers were greater than the average viewers of the NHL, MLB and the NBA on cable as well as the most watched shows on FX.

Similarly, if you just looked at boys, 6 to 11 an indication of the kid demo, our average viewership in that demo greater than the top show on Nickelodeon, Nick Tunes, some other networks.

If we looked at adults, again the key theme, WWE's average viewers in that demo greater than the number of watched shows on networks that people usually would associate with the adult demo.

Females which when we show this to our sponsorship partners, I think this is the data that they take a step back the most is our viewership compared to the top show on TLC or Oxygen or Food Network. It's really an amazing when you look at the diversity of the audience and the intensity, it gets back to the number I said before. You say, hey two thirds of the audience is male, a third is female.

When you look at the size of that and then you compare it in that particular demographic to things people normally associate with the female demo, you see just that the absolute scale is greater. So it's real powerful for us selling our advertising for example. But, really, really powerful when we are taking our product and bringing them to our network partners.

Recent analytics we have been doing to really understand the value of our different shows to partners and this is a slide for Raw. If you just looked at the last five years and looked at and ranked, USA Network where Raw is on every Monday night and ranked USA's top 200 shows over the last five years in the key demo, men 18 to 49, Raw makes up every one of those shows. So Raw is number one trough 200. For the top 200 most watched shows in that demo over the last five years.

If you just looked at total viewers and ranked those shows one through 200, that USA has had on in prime time Raw makes up 84%. So 168 of the 200 shows over the last five years for USA, most watched shows is Raw. It is pretty powerful. The reality is USA is the number one cable network in the United States in terms of viewership and Raw is its number one show. If Raw were to move to any other network and the math is pretty easy to do, that network becomes number one.

We talked about the brand. We are maniacal about measuring the brand and feeding it and keeping it healthy and growing and we track it in a variety of ways. But I think the most important thing is that whatever metric you use, old metrics, new metrics, the brand is incredibly powerful on a global scale. Social media has not only become a great platform for us to engage our audience in a lot of different ways, but it is also great platform to get real-time data on what is working in connecting with your audience.

Today you look at Facebook and Twitter combined and utilizing that as a proxy for audience, WWE has more social media followers on the platforms than the NFL and its 32 teams combined. It's amazing.

If you look at our viewership on YouTube, we have had a great relationship with YouTube. I think we are up to and trailing 12 months almost 1.5 billion video views on YouTube. Some data I saw suggested that was somewhere between 1.5% and 1% of all of YouTube's video views for the last 12 months. So the scale is incredible.

WWE is an amalgamation of a lot of brands. There is the WWE brand. There is Raw. There is Smackdown. All-powerful brands in and of themselves but then our superstars are brands as well. John Cena is the third most followed American athlete on Facebook today. He has over 12 million global followers.

Let's talk a little bit about the business performance and to do that the company has made some significant investments recently in its business looking towards the future. I think it make it a little bit easier to look at the financials by dissecting that. So I will talk about the core business. Our traditional core business, that’s our live event business, pay-per-view business, TV licensing, integrated sales and sponsorships, our videogame, our toys, everything that WWE has done and done very well.

We will pull out our studios business and talk a little bit in detail on that. So WWE is in the business of producing both theatrical and direct-to-DVD movies. I will talk about that business. Then finally over the last five quarters or so we have been making significant investments in launching a WWE network. It has yet to launch but we have been making the investments to prepare for that. So I will talk about that separately as well.

I think one of the important things when you dig through that is, although in 2011, the trailing 12 months, our EBITDA fell down fairly significantly from where it was in '08 to '10. That is primarily driven by those investments that we are making. If you just look at the core business, it has been in the $75 million to $95 million range over the last five years in terms of EBITDA. So the core business remains strong, some years it's stronger than others.

Certainly there have been some secular and cyclical challenges that we faced over the last couple of years, but if you just cut through that, you are really looking at a traditional core business that is generating $75 million to $95 million in EBITDA. Free cash flow tracks with that as well and we will talk about that little bit.

Internationally in that core, the businesses doubled since 2004 and it's doubled through a variety of means penetrating in to new markets as well as taking markets that you have invested in and growing those. Our market entry turns to take a fairly traditional S curve in terms of growth where you go in, over the first few years you are investing in the brand, inculcating it, and then you reach an inflection point and the brand grows.

We then are renegotiating commercial agreements. We are getting better terms because either you are providing more TV viewership, you got more movement of retail, you get better placement. So things that naturally happen but it tends to be an S curve. But when you cut through them and just say, over the last eight years it's doubled. We have seen a lot of growth on the television side and that gets to the point that I made before.

Our TV is how we enter a market and we usually secure television placement at fairly low economic returns and then over time as we deliver on the brand and deliver on viewership our renegotiation tends to work pretty well in our favor. And you see that.

We also see a significant increase in our live events. Over the last eight years we have gone from doing roughly 20 or 30 live events globally to just anywhere between 70 and 80. Our live events, it's one of the things, as a television property that really makes us unique. We are able to bring our talent really, really close to our fans and that’s a big part of energizing the fan base.

In fact one of the operational tensions that we have within the company is exactly where those 70 or 80 events are going to be held internationally. If you are the person managing the live event, P&L you very, very focused on driving the markets with the highest margins. If you are managing the global P&L you like bringing the live event maybe to a market that you are trying to grow because we know that works.

So it's one of the operational tensions that we have. But long-term, we continue to view our global market as having significant opportunity. Some challenges in the short to intermediate-term. We will talk about both but generally while we feel good about the U.S. business, we think the international business will probably grow a little bit quicker than the U.S. business at the core. Again the networks will be a little bit different animal because of the investments in the potential launch strategy U.S. first.

We have talked about quite a bit focusing on creating more content and we saw that $75 million to $95 million range in the core business EBITDA, one of the things that’s impacted it negatively is as we were engaging discussions on the network, we took two hours of prime time TV off of domestic distribution. That was our NXT show as well as our Superstars show. Those are significant economic engines. They came off. We didn’t place them again. Over the last four months we have gotten those two hours back in the market different shows but they are back in the market and we are monetizing them.

So essentially we are doing 20% more content this fourth quarter than last year's fourth quarter. Roughly 80 hours. About half of those, about 40 hours are due to the third hour of Raw a new show on ION, WWE main event and a new kids show on the CW, WWE Morning Slam. So very much focused on creating content.

Also really important is that that content id delivering for our network partners. So the third hour of Raw is up 35% versus what it replaced for USA. So they are very happy with that. ION's main event is up about 15% from the show it replaced. So they are also very happy with that. Our morning show on Saturday mornings with the CW on their Vortex platform is up 50% over the show it replaced. So that’s really, we consider ourselves to be really good partners and like to put ourselves in the shoes of our partners. We know what is important to them and we get really focused operationally in delivering for them and I think in all three cases we have very happy partners for those shows and economically it puts us back to where to were in 2009, 2010 in terms of number of domestic hours that we monetize.

Talk a little bit of our film business. The film business has morphed in strategy and execution over the last few years. WWE launched its film business in late '05. Early '06 and essentially we produced six film, invested roughly $100 million dollars gross, up $75 million net of tax credits. We produced these films generally in localities where there is 20% to 30% and in tax credits but gross of about $100 million, and right now the projected return on and ultimate basis and now these are fairly long-lived films.

So we feel pretty good about the productions. It is essentially just above breakeven in cash-on-cash return. That model was characterized by partnership. Each of those movies were co-produced, co-financed, for the most part and co-distributed with different partners, Fox and Lionsgate, to name a couple.

We thought we could do better by going it alone and we invested roughly $50 million in producing, financing and very importantly, distributing. So having all of the distribution execution on us on eight films. There was a series of impairments that we are taken in 2011 on those films and today we think the expected cash-on-cash return which with those impairments, the P&L impact has been felt pretty significantly but on a cash-on-cash basis roughly a 30% loss.

So by any measure it was a strategy that was poorly executed. We have gone back essentially wiped that entire operationally the internal operations, wiped that clean, brought somebody else in to run our film business. A gentleman named Michael Luisi, long career at Miramax. It's really the first time we have had anyone running the film business with significant commercial experience. We had creative folks in those roles before. But Mike brings a significant level of commercial experience and he has been retooling the model.

The way I described it is it looks a lot like the first model, the first $100 million just better executed, better deal terms and but it passed the three main pillars that the first model had, in that we are partnering on a financial level, we are partnering on a creative level and we are partnering on the distribution side. So you have seen us announced partnerships with Pathe, Troika, Fox. It looks, again it feels a lot like our first model but because of Mike's experience significantly better deal terms. In fact, one of the things we did is we took those first six movies and said what if they had perform just as they performed but with the new deal structures that we will bring to the new movies. What would that 3% IRR have looked like, and it's about 15%.

We think the model going forward and internally it’s a conservative threshold but we model our green lighting process on a minimum of a 15% portfolio return and you see the slate in front of us and one of things you will see is that very diverse in terms of genre, very diverse in terms of partnerships and also very diverse in terms of stars. In some cases it's our talent that leads the way.

So Marine 3, the first two Marine's are most profitable movies. So it’s a good solid franchise. It’s a direct-to-DVD. We are partnering with Fox on that. We have one of our stars, the Miz as the lead role. However in others, its WWE talent in secondary or supporting roles. So Hive with Halle Berry has one of our stars, Dave Otunga in a supporting role, very different kind of model creatively as well.

So if we wrap up the issue of diversity around platforms, just a real snapshot of the businesses that we fit in and kind of their economic and business profile their leverage, the growth, the risk and the capital intensity, I think the main takeaway here is that overall fairly significant operating leverage. Our TV and digital advertising and licensing businesses have very, very high leverage. The other business is a little bit less so but when you look at the portfolio as a whole, it's in the low to mid 70s depending on the mix of revenues.

Then on the growth side, we continue to believe that the television is kind of monetizing, television is an old term, it's really the monetization of video content wherever you do it, Hulu, YouTube. We are one of YouTube's 100 channels last year when they launched their foray into original content. This year we announced that we had signed a deal with Hulu where they are the exclusive replay of Raw and Smackdown, Raw replays is actually, that takes the three hours and brings it down to 90 minutes.

So it's almost a slightly different show but regardless wherever the video is being monetized, we see that the real opportunity. We see growth there. Very high operating margins because we create our content once and then monetize it in a variety of those different platforms and also we have the ability to mine a significant library. We have over 100 million hours in our library where we own 100% of the IP.

I talked about these before. Reinforce it. For us it's all about the brand. It's about creating content and it's about taking advantage of this unique place and time we have where the value of content is being driven up by the proliferation of distribution outlets. So as we look forward we see some challenges but we also see a lot of opportunities. Some of the challenges, none of us are forecasting internally at least, robust growth in some of the more developed markets.

So that’s something that will have to navigate and obviously we have a very large U.S. business and still internationally roughly 60% of our international business is EMEA centric. We have made a lot of investments in emerging markets but as we sit here today, 60% to two thirds is in EMEA.

There is also some structural changes in the home entertainment business. WWE as these change is taking place has actually weathered it pretty well if you looked at over the last four or five years. We certainly have felt some pain in that business, but if you looked at the industry as a whole, we have actually outperformed it.

One of the reasons is because our fan base is very collector centric and they like collectibles. They like the physical product which is one of the reasons our home entertainment business, we believe, has weathered that change a little bit better but we all know where it is going. Optical disk drive are going by the wayside over time and we need to manage that transition. Higher margins because of the lower distribution costs but the price point becomes the issue and that’s something that we will have to, like a lot of our collagen content business, we will have to manage through.

There is also structural change in the videogame industry. Even though the videogame industry has grown for the most part over the last four or five years, the mix has changed. Console games have declined while social gaming, online gaming has increased. WWE has a great console franchise. We need to do better in some of those other platforms within the videogame space.

We have also made significant investments in new businesses. I talked about it before. The core business, $75 million to $95 million in EBITDA over the last five years but those investments we have made in studios and in the network have impacted our earnings and we need to manage through that.

On the opportunity side, global value of content, I will share some data in a little bit, more and more media outlets. So you have traditional outlets, but as well as OTT. We made a lot of investments in emerging markets. Some of them are already eight figure market for us. Markets like India and Mexico. But in a place like India all of those economics come from our TV licensing deal.

We hardly make a dollar yet from consumer product. But that will come. The reason we make so much money on our TV licensing deals is because our shows do very well in India. So our partner rewards us for that. We feel really good about that and we feel really good about what could that mean in consumer products in the future.

China, we been in China now for six years. We are in 145 million homes available. We are very, very disciplined and taking a very, very long view of China. Very easy to make execution mistakes in China. So its one of the reasons we are going very slowly but over the six years we have gone from availability in zero homes to 145 million homes.

We also, over the next few years have some significant commercial agreements. We have delivered significant value to our partners. So we feel very good that those agreements are coming up. Our agreement with the USA on Raw, our agreement with Smackdown on SciFi, our agreement with BSkyB in the U.K., our agreement Taj TV in India and our agreement with Mattel.

In all five of those cases, we believe we have performed in exemplary fashion. So we feel good that those agreements are going to come up in the next few years. We look forward to seeing economic growth in that.

Probably the one place where our numbers really don’t match our metrics at all is our integrated sales and sponsorship. Right now, less than 5% of the company's revenue comes from that. When you look at all those metrics I mentioned, all those brand metrics, they don’t jive and we know they don’t jive. There is a lot of operational issues on that. There are some brand perception issues in the U.S. vis-à-vis advertisers that we have to work through but if you ask me, and it really is a tipping point model. It's getting through those brand perception. I think then you potentially have some real opportunity there but when we look over the next three to five years, we really think that they are there economically.

Gamification of content and just online and social gaming. As I mentioned before we have got a great console game. It does incredibly well. It's now done over 50 million units worldwide since its inception. One of few annual franchises that remain and continues to deliver results but we have been laggards, quite frankly in the gamification of content in social gaming and online gaming and we are very, very focused on not being laggards. That’s not part of the WWE DNA.

Then finally social media. I think like a lot of people not really sure how to monetize but we know that we have aggregated a significant amount of audience there. We think that’s a good place to start. Obviously we use it today to engage our audience in a variety of ways but we want to do more there. Its not just transactionally do more, lots of opportunities there, but it's really how do you use that platform to drive the power of the brand just on a broader deeper basis and also do it globally.

The ability to, for example take storylines from television and bring them into social media and then back, we just think it is ability to create a lot content and really engage our fans. So really happy with where we are in social media and the growth has been trailing 12 months, if you look at our Facebook and Twitter followers, over 50%. So we have executed pretty well on that. It’s a strategic goal of the company but we look forward really doing more with social media.

I talked about the value of content. I have this slide. Those boxes for just about every country we do business and they all tell pretty much the same story and that is that global forecast for the content value chain and the way we define content value chain is advertisers and advertising dollars plus what consumers are paying for subscription television. It has been growing and is expected to grow.

Even in markets where economic growth is expected to slow like the U.S. and the U.K., the content value chain is expected to continue to grow. Then in countries like India and China the expectation is double digit growth. Those numbers are right or wrong less important is the trajectory. Like I said I have this slide for just about every country where I can get the data and they all are upwards and sloping to the right.

So when you we put that all together when we look to the future it really is continuing to do the things we have done well in the past. If you went back to 2005 WWE had $350 million in revenue, about $80 million or so outside the U.S. The way it monetizes is it created this content, monetized that IP and then 360 degrees around it in video games, toys, t-shirts live events pay-per-views and so on.

Over the last trailing 12 month, you see the growth from five to 2012 when we look to the future, we want to take advantage of prior slide that demand for content and the value chain growing as well as our investments internationally to drive the growth in to the future. In a nutshell that is the business model.

We have talked about the core. We have talked about films. The other thing we talked about is a potential for WWE network and over the last four or five quarters, we have seen significant investments both in CapEx and OpEx in the network and showed some of that before and how that has been a drag on earnings in the short run. We believe there is an opportunity to transform the company strategically and economically and this slide is one of the fundamental reasons for that belief. We have done a lot of deep dive rigorous research on our audience in the U.S.

If you look at the 116 million homes in the U.S. that’s how many households are in the U.S., there is 100 million television homes and then 90 million digitally enabled homes. So if you took the 116, about half of them, 57 million, 58 million homes would identify themselves in some way shape or form as having affinity to WWE.

So it’s a pretty large market for us. If you took those 57 million homes and then segment, which is the bar chart to the right, about 20% of that is what we would describe as our passionate hard-core homes. Those are the homes were someone in the household is watching WWE on a really regular basis. They can identify superstars, not just the John Cenas of the world, but the Dolph Zigglers, because that was part of the survey we did. You actually had to be able to name superstar to be able to fall in to that hard-core category not just self identified hard-core. You have to prove it to us. So we love everyone but we trust no one. So you have to prove it to us.

That’s about 20%. About 40% of the WWE homes are what we call casual fans and those are fans who are watching our content throughout the year just not with the same intensity as our passionate hard-core. Then the 40% is our lapse fans. Those are households that have someone in the home who watched the show at one point in time over a year ago that was the cutoff and just no longer is engaged with the brand but interestingly enough we saw kernels of opportunity when we looked at the network even in that part of the fan base.

But the point being significant audience scale and within that survey, there is also a lot of questions about appetite for new content from WWE, appetite for existing continent that might be delivered slightly differently and I can't get into too much detail there as well as willingness to pay.

We have talked about us going to market a network in one of three models. A dual-stream network, fully distributed, advertising and affiliate fee. A pay network, similar to an HBO model where the consumer would bear all the economic burden, no advertising primarily and then over-the-top. So the willingness to pay is both an indicator of the intensity to watch the show and that’s applicable to all three that willingness to pay also is applicable for the second and third one where it would be more of a direct-to-consumer economic model.

As we looked at all three of them and this is the underpinning for all three models in the other data that I just mentioned. We just believe there is too much there potentially not to keep pushing at it. The drag on earnings is painful. It's painful to investors. It's painful to us but we just believe payoff could be too large so we are going to continue to push on that.

Then finally when we look at the financial model and the return of capital to shareholders, if you looked at that core business that I mentioned before, that’s done $75 million to $95 million in EBITDA. Free cash flow for that core business has averaged about $55 million over the last five years. Some lumpiness but its average about $55 million.

The current dividend load is approximately $35 million. So if you look at WWE's payout based on its historical free cash flow, right now it sits in the mid-60s. The bar chart represents the Russell 2000, and the average payout based on expected growth rates.

Our peers around 30%. The average of the dividend payers and the Russell 2000 is just slightly above that. So we feel that that being in that 60% range is actually fairly aggressive return to capital to shareholders. Again that percentage is based on the core business is because we have used our balance sheet to fund the investments into the network and studios.

The final point I will just touch on the management team. I think what you see is a lot of diversity. You see folks who have been with WWE for a long time. Obviously it’s a family founded business and the family continues to be a big part of the operation starting with our CEO, Vince McMahon, his daughter Stephanie is a key executive in the company. She runs our creative and digital businesses and then you also see sprinkled throughout people with different backgrounds who have joined over the last few years. Myself, our CMO Michelle Wilson who came to us from the USTA and the NBA. I talked about Michael Luisi running our film business who had a long career at Miramax.

So we try to blend the institutional knowledge DNA of the company with a broad array of expertise. If you leave with anything it's the strength of the brand, the fact that our content is proven, it has a long history and it delivers results, week in and week out. We are the only programmer that can do that for any of our partners. We not only provide tonnage. So we provide new programming 52 weeks a year, but we drive ratings.

That number when you rank USA's top 200 shows over the last five years in terms of total viewers we are 168 of those shows and 200 in their key demo. That is important, and we believe we have got secular trends behind us and if we execute there could be some meaningful growth for the company moving forward.

I think at this point we could turn it open to Q&A.

Question-and-Answer Session

Janine Shelffo - UBS

Terrific, maybe I can just kick us off with a couple of questions, George. It was a terrific presentation. You talked a lot about the proliferation of distribution opportunities for the company and it's a really complex optimization that you have to do effectively. With some of with some of your new moves, including the cable channel you have talked about, obviously there being an audience out there of lapsed fans that hopefully you can reactivate hut for your Hulu Plus deal and some of the other distribution deals, how do you think about cannibalization of your existing distribution versus overall growth?

George Barrios

I think your first point is key kind of foundational premise which is it is very complex, number one and it is continually evolving, number two. I guess those two things are related. So one of things that you will see in our deals is we have tended to make them fairly short-term because we want the flexibility to adapt. I think the lynchpin of your question was around this cannibalization question and we view it in a different way.

We think that given the way people are watching video and consuming video today on average in the United States people consume roughly 6 hours of video a day. About five hours of that is on traditional TV, about another hour on tablets, online and mobile and that one is growing. So I am not sure the six hours will change a lot although it has grown. That number has grown, the total, but certainly the mix, we believe, will continue to change.

For us, its signing shorter-term commercial deals and on the cannibalization it's the more that were out there we believe it grows total viewers and total audience and that what’s good for the WWE will eventually be good, obviously for us economically but also for our partners.

So I remember a few years ago when the NFL was first starting to diversified its programming partnerships there was a lot of talk about cannibalization and would they in fact devalue their deals going forward by being now multiple places and having people having them go to different places to the show whether its on their NFL network, new deals with ESPN, the Thursday night, all that. In actuality, the opposite has been true. They have grown.

On a smaller scale, we have seen the same thing for us when we went from six hours of television to four hours of television domestically couple of years ago, our total viewership declined. Is there duplication between Raw, Smackdown and now Main Event, Saturday Slam? Of course there is some duplication, but there is non duplicate of the audience.

So the more that we are out there, the more we grow but I do agree its complex, it's ever evolving. The value chain is getting shifted around. It's not just the total value chain that’s growing, its if you are creator, aggregator or distributor, how those economics are being divvied up is changing and even within the content creator, its changing. I think you are going to see instead of a bell curve on what the content creator is getting you are going to see more of a binomial distribution.

I think its too nerdy where you have a few people getting a lot of money and a lot of people spreading the other part of that money, but individually getting much less. So if you can create any center of gravity of audience and we believe the numbers that we are delivered is that center gravity, I think you can do very, very well. So I answered a few different things. But that's how we look at it and it is complex.

Janine Shelffo - UBS

Very helpful, do we have questions in the audience? If you do, just raise your hand, and we will bring a mic over to you. And while you are getting your questions together, maybe I will ask another one of mine. Sort of a related question. Obviously you are stepping up your hours of new programming on TV currently but as you think over a three to five year time frame, presumably with the cable networks coming on and between, how do you think the breakdown between viewership of new content versus catalog shifts over that time period? Is one of the results of the proliferation of distribution alternatives to help you actually monetize your catalog more effectively?

George Barrios

In late '08, early '09 when we were thinking and it’s a process we go through every year kind of three year plan, thinking what's going on externally, take time internally to focus more external than inside but one of the ideas that really terminated internally was this whole idea of the value of content. Some of things that we just talked about continuing to accelerate these trend and that for us we needed to figure out how to monetize more content.

So we have always done a good job monetizing our library. If you look at our home entertainment business which, half of it is roughly library, the other half is our annual pay-per-views but little ten year life of that businesses it's around from $300 million in revenue. You could attribute at least half of that mining the library.

Same think in our SVOD business, people five or six years ago, thought SVOD was the next big platform and it probably will be just in a slightly different manifestation. Unfortunately, the platform that exist today, the on-demand platforms and so on, although the IP guys have done a nice job, the cable is still a real clunky platform. It never got the traction people thought it would get but regardless, for us it’s a nice business that over the last five years has given us about $20 million to $30 million of EBITDA.

So we have done a good job but really we have only skimmed that library. So as we started thinking about best ways to monetize and there is different ones, there is big output deals you could sign is one example, the network, just we kept coming back to that as being the biggest bang for the buck. Now we don’t view the network as a catalog network. There will be powerful, compelling exclusive original content that will be the core because otherwise people aren’t going to either watch it in the numbers you want or pay for it if you go that model.

But we can wrap around some very fresh, compelling content that’s created from our 100,000 hour library. So for example, one of the shows that’s in production right now and it's tested really, really well in our focus group is the Monday Night Wars. It will be an episodic series, number of episodes be determined but somewhere between 10 to 15 episodes that looks at the year 2000 and 2001 battle between Ted Turner and Vince McMahon when they were on competing networks fighting for audience.

So there are some really cool things going on in the ring but there are some really interesting things going on outside the ring that would appeal to a slightly different audience and the lapse fan I talked about before, one of the kernels that we found was that the lapse fan really would be into reliving that a little bit. Especially parents with their kids on what to be able to talk to their kids about things that they were seeing and watching and so on.

So we think the network allows you to take thousand hours of the program which is a lot but it gives us that opportunity to own our content and also maximize significant amount of it. So that’s where that came from. It’s the ability mine that catalog in a fresh new way and also put new content out there.

Janine Shelffo - UBS

Any questions from our audience? Right up front here.

Unidentified Analyst

I am Nathan, nice to meet you. I have a two-pronged question. One being WrestleMania being here this year. What are your expectations, your thoughts? It's exciting, I guarantee it, because people love it.

George Barrios

It will be huge. I can guarantee you.

Unidentified Analyst

Are there going be any differences than it was last year in Miami in terms of being more on the East Coast than being down there? It seems like it was a great investment on you guys part. Besides using it in Raw and in Smackdown, are there other ways that you are using it or do you have other plans for it?

George Barrios

In using it? I lost the it, what's that?

Unidentified Analyst

Tout.

George Barrios

Oh, Tout. Yes.

Unidentified Analyst

Using it because I know it is being used in Raw and in Smackdown in real-time being able to be select as we shift from in to that real time content, are there any ways that you guys are planning on using it?

George Barrios

So, first on the WrestleMania question. Obviously WrestleMania 29 is going to be in the Tri-State area this year. Over at the MetLife, I was about to call it the Meadowlands, MetLife stadium. So we are really, really excited about that. WrestleMania, for us, is like the Super Bowl for the NFL. It’s not a one-day event. It’s a weeklong event. It always is.

So we have a lot of different, there is a red carpet event we will do in the city. We have our Hall of Fame event which will be done as well. So it’s a weeklong, it's an economic engine for the community. We do a lot of economic development studies after we conclude a WrestleMania and I think Miami was north of $60 million of economic value created to the DNA.

It's one of the reasons every year there is a bidding process to the win WrestleMania. Given that it's in our backyard, obviously everyone's thrilled about it. If you ask me every year we try to make it bigger than the last year. So we will try to make it bigger than the last year. There is an immense amount of energy. I could tell you what some creative would be but I don’t think I could make it out of the building alive. I am sure somebody would find me and take care of that.

But I think the creative is going to be really cool and we are really excited about it. Regarding Tout, I mentioned it before, we have investment in town and they are series B and the way that came about is because our digital team is working really hard with them, but integrating the technology into the show and we became fascinated by the technology and we really thought, boy, we are going to really drive the value of this company by integrating it and we have.

Tout went from being very successful to being the number one downloaded app, social video app on the iOS platform. I think it's also the number one Android app in that category in India, just to give you a sense of the global scale, but we are going to continue to use it to get our fans into the show. It's a way.

Andy Warhol talked about the 15 minutes of fame everyone would have. Tout, on our show allows people to have 15 seconds. That’s like the Twitter for video and gives everyone or the user 15 seconds of fame on either Raw or Smackdown or Main Event. So what you will continue to see is integrated more and more into all our shows. We have been kind of Raw centric.

We are using it in the other shows but it's been Raw centric. I think you will continue to see it in more and more shows and were going to continue to be creative in how we use it. I think you are also seeing the production values as our talent and our fans get more accustomed to using it. The quality of the 15 seconds improves. So I think you are going to see that as well. But we like the platform a ton. We love our engagement. It gets back to the whole social media element of it.

Janine Shelffo - UBS

Great, I think we have run out of time, George. Thank you very much.

George Barrios

All right, thank you very much. Thanks for your questions and time.

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